Rise of Design Consultants
Should integrators worry or embrace the growing trend of homeowners hiring third-party design firms directly, then putting systems out for bid?
Bob Kranson of Axiom Design in Pleasanton, Calif., is not new to this realm. In fact, he has been doing design and software for homeowners for 20 years. At any given time, he has 20 to 30 jobs ongoing in various stages.
“All of my clients are homeowners,” says Kranson, who adds his large-scale systems typically include design, construction and software services. “Integrators are usually competent in one or more of those areas, but rarely in all three. And they are not likely to maintain proper margins in all three areas.”
Axiom’s primary roles as a consultant are to educate the customer about what technologies are available and the risks/rewards from each option, and to produce engineering documentation.
“I am just like an architect,” say Kranson. “Technology without a plan is more likely to become a science project versus a construction project. At some point, the custom installation industry has to realize that products are a commodity, and service is the differentiator. End-users are becoming more savvy about what they want and don’t want. Dealers need to recognize that their service is the value-add, not products.”
Mark Sipe of Prime Industrial Design only recently joined the consulting world. Sipe and his wife, Susan, run several companies in the custom installation space, including X-Spot, Abacus Prime Consulting and SalezToolz software.
Last year, Sipe was contacted by a long-time friend to manage the design and construction of a massive 28,000-square-foot, $20-million home in Paradise Valley, Ariz. The trials and tribulations of the job have been documented on cepro.com, as Sipe has faced budget issues, an intrusive homeowner and unforeseen problems - namely the architectural firm folding and the integration company being purchased. But through it all, the job is progressing, and Sipe sees consulting roles continuing to gain momentum.
“This is absolutely a growing trend,” he says, noting that he has recently been hired to oversee the technology implementation in a 180-home community in Mexico.
Firefly Design Group in Hollywood, Fla., has seen its revenues migrate from only 5 percent from homeowners in 2009 to 50 percent in 2011. In a six-week span this spring, the company awarded $7 million worth of homeowner-driven projects to integrators.
“Generally the people who are hiring us have already been through multiple integrators. It is usually not their first house with automation, and they are seeking an alternative,” says Ron Callis, president. “They use us because we are brand agnostic. They know I’m not trying to sell them product because it is sitting in my warehouse.”
The primary services Firefly provides are: discovery, design, construction documentation, bid management and construction management.
“We don’t necessarily design better systems than an integrator can,” admits Callis. “I’m just giving the client an experience that he desires. Meanwhile, the integrator is getting a job handed to them once they have competed with a couple other dealers. Firefly doesn’t make any percentage on those jobs. I have no stake in which integrator gets selected. All the bids are sealed and sent to the client [who is an architect in many cases.]”